Unless you have been hiding under a rock for the past couple of weeks, you are undoubtedly aware of the recent financial crisis that has come about here in America. Long story short, several large investment and insurance firms, such as American International Group (AIG), have been teetering on the edge of bankruptcy as a result of the collapse of the sub-prime mortgage market. The crisis is serious enough that our government has stepped in and has now created an $85 billion “bail-out” plan for AIG. Under the plan, the government will basically take control of about 80% of AIG’s holdings.
Now I’m no Alan Greenspan, but this whole bail-out move is something I am really struggling with. Fact is, the American free enterprise system is one that runs on greed. As Americans, we want more money, so we are willing to take certain risks to get more money. In the case of large insurance firms such as AIG, they have capitalized on these risks, and when economic times are good, they make boatloads of money. But suddenly, when certain economic factors come about, there profits shrink down to nothing, and they end up in bankruptcy. Now here is the part I struggle with…why is it my responsibility as a taxpayer to bail them out? When times were good for AIG, I don’t remember ever seeing a credit on my paycheck that said something like “AIG Rebate”? Boy, that sort of sounds like socialism, doesn’t it? Scary stuff.
Again, I’m no Wall Street wizard, and I can’t say I have a better idea of how to solve this crisis. I do trust our government when they say that something needs to be done here, but I’m just concerned about the precedent we may be setting for the future.
G’Night G’Town!
Only those who dare to fail greatly can ever achieve greatly. ~Robert F. Kennedy
